Cutting Edge Orthodoxy

[mcclintockbrent%faculty%Carthage@xxxxxxxxxxxxxxxx]

Randy Wray asks: can anyone imagine cutting-edge orthodoxy being called in by
policymakers?  -- Not only can I imagine it, I've seen it! Admittedly this
was not in the dizzy heights of American economic policymaking but in the New
Zealand context but we shouldn't get too nationalistic about these things...

>From the early 1980s on, New Zealand Treasury officials adopted and applied
the transaction economics of Coase, Williamson, and North to policy issues.
Principal/agency theory, for example, was applied to the commercialization
and privatization of state-owned enterprises. Another area was business law
reform. Indeed, the lingua franca at the NZ Treasury from the early 1980s on
was (is?) transaction cost jargon. Why, one of my former colleagues at the
Treasury even consulted with North & Coase prior to their receipt of the
Nobel! All this said, there was/is a heavy dose of orthodox monetarist
thinking in Treasury policy advice to the detriment of the New Zealand
populace. And U.S. Treasury economists on exchange in NZ in 1990 couldn't
believe this use of transaction economics since it was too outside the
mainstream thus wouldn't get the time of day in D.C.

Cheers,
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~|~~~~~~~~~~~~~~~~~~~~~~~~~~~|
Brent McClintock                    |                           |
Economics                           |   People have "a taste    |
Carthage College                    |    for effective work     |
Kenosha, Wisconsin 53140            |    and a distaste for     |
USA                                 |     futile effort"        |
Phone: (414) 551-5852               |                           |
Fax:   (414) 551-6208               |      Thorstein Veblen     |
Internet: btm@xxxxxxxxxxxxxxxx      |                           |
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~